- The US SEC tried to get Justin Sun’s appeal to dismiss the securities violation case hindered.
- A federal judge sided with Sun, denying the SEC’s request.
Federal Judge Edgardo Ramos of the US District Court for the Southern District of New York has denied the US Securities and Exchange Commission’s (SEC) attempt to thwart Justin Sun’s appeal to have the securities violation case against him dismissed. The SEC claimed the Tron founder and his lawyers introduced an argument that broke the norm of legal proceedings.
This suit was brought in March last year, accusing the founder, the Tron Foundation, and allied companies Rainberry Inc and the BitTorrent Foundation of selling unregistered securities, indulging in market manipulation, and more. Sun and his legal team have worked to get this case dismissed, using the argument that Tron sold tokens to foreign investors outside the regulatory bounds of the SEC.
The regulator, using the Howey Test as a medium to prove Sun offered securities to investors illegally, feels he brought this argument late into the trial, which should not be admissible. It wrote a letter to the judge stating that the defendant’s defense of selling TRX (Tron) and BTT (BitTorrent) tokens not falling under the “common enterprise” of the Howey Test should not be considered. Its other suggestion was to have him introduce the argument through a sur-reply.
Sun’s Legal Team Clapped Back
That was not the only letter sent regarding the matter, as Sun’s lawyers clapped back with their own. They spoke of how the SEC is trying to “manufacture a controversy” and that he never argued the “common enterprise” element of the Howey Test. The lawyers claimed the appeal to dismiss the case stems from denying the “expectation of profit” aspect. This argument was introduced into the case well within the accepted time frame and their later request for dismissing the case falls under the said aspect.
Judge Ramos sided with Sun, dismissing the SEC’s attempts to bury their argument to have the case thrown out of court or file a sur-reply. He said, “In light of defendants’ concession that they (are) not challenging the “common enterprise” element of the Howey test, the SEC’s letter motion to strike the untimely argument or for leave to file a sur-reply is DENIED.”
